FERC

Building new transmission across the entire U.S. is an idea that continues to dominate discussions about the future of electric power. Many believe large amounts of power need to be moved across the country, or that transmission is needed to relieve congested areas, or to make sure enough renewable power is built. But transmission capacity is only part of the remedy to system constraints, and policy decisions and investment strategies must be based on sound evidence and economically rational planning.

Demand response isn’t energy: It’s a separate product, traded in a separate market. Policy trends, however, are moving toward equal treatment for demand and supply resources in electricity markets. Does treating DR as energy inflate its value and create perverse incentives?

A look at the issues that the Federal Energy Regulatory Commission must address concerning allocation of costs for certain high-voltage transmission lines 500kV or greater, planned for the PJM region, in the “paper hearing” on remand from the 7th Circuit federal court decision that rejected a socialized, region-wide sharing of costs among all utilities and customers across the RTO footprint.

An increased reliance on renewable energy could threaten reliability of the nation’s electric transmission grids by reducing the rotational mass and rotational inertia of on-line turbine generators, thus, reducing the capability of generators to respond to drops in voltage frequency. In fact, data collected from 1994 to 2009 for the Eastern Interconnection already reveals a drop in the grid’s capability (as measured in megawatts) to stop a very rapid drop in frequency — such as a drop of a tenth of a cycle per second.

FERC owns more than one enforcement tool. Besides civil penalties, it can require compliance plans or disgorgement of unjust profits, or condition, suspend, or revoke market-based rate authority, NGA certificate authority, or NGA blanket certificate authority. And lacking criminal penalty authority itself, FERC can refer matters to the U.S. Department of Justice for criminal prosecution. Moreover, while defining an organization as any entity other than a natural person, FERC nevertheless will continue to determine civil penalties for natural person violators, looking to the guidelines for guidance in setting such penalties.

In order to fully integrate wind and other dispersed sources of energy into the system, America’s patchwork transmission networks need to be more closely interconnected and synchronized. An advocate for the Tres Amigas merchant transmission project explains how the proposed facility will integrate the grid.

America’s electric utilities understand their central role in taking efficiency and conservation to the next level. Accordingly, the industry has nearly doubled its spending on efficiency measures in the past few years. But encouraging customers to save energy won’t be enough to keep pace with the electricity demands of a growing digital economy. The country’s efficiency efforts will be most effective as part of a clean energy portfolio strategy.

FERC’s proposed penalty guidelines provide the opportunity for improved regulation. More practical and consistent characteristics for determining penalty fine ranges will increase penalty predictability for industry violations of federal regulations—and will make FERC’s enforcement more fair and transparent.

California’s new feed-in tariff (FIT) is creating a burgeoning market for green energy investments, but the policy has sparked a fierce battle over state authority to dictate wholesale power transactions. A federal case will determine whether the 1978 Public Utility Regulatory Policies Act pre-empts states from requiring purchases that exceed utilities’ avoided cost.